Monday, September 16, 2013

Zambia

This article makes very depressing reading. Colonialism may be dead, but colonial exploitation techniques are very much active...

Zambia’s GDP growth has been above six percent for over a decade, riding the wave, as always, of increasing copper prices. Copper is 40 percent of Zambia’s GDP and 95 percent of its exports, but little of that money makes it here... Many of the mining companies pay just 0.6 percent royalties to Zambia, far below the already-meager industry standard of three percent. One mine reportedly got the low rate by telling the government “this mine’s basically tapped out, we’ll just be here two years.” That was more than 13 years ago, and the royalty rate hasn’t gone up, even though the price of just about every mineral you can squeeze out of Zambia has.

There is even the colonial land grab...

First, a company comes in and gets the chief to allocate a big plot of land by promising to feed his tax base, build schools and roads, offer jobs to his friends and neighbors. Then the company pays off the surveyor to give the company more than the chief originally allocated, and to file a report saying the land is vacant, out of use, culturally insignificant.

As soon as the ink on the title is dry, the company starts negotiating with the national government to get a tax holiday so it can avoid paying the taxes that were the condition for the chief allotting the land. The chief complains—where are my schools, my hospitals, my jobs?—but by now the land isn’t under his authority anymore, it’s designated as “state land,” and he has as much a claim to it... The companies aren’t required to disclose the size of the land they purchase, the length of the lease, or the procedure they followed to get it. The people living on the land are in the dark until one day a company man knocks on their door with a deed to it and, if they’re lucky, a payout if they agree to leave.

If anything has to be done to improve the situation, the country needs a state that is capable of getting atleast somethings done. But on state capability, things look even bleaker ...

As of 2012, the Ministry of Labor only had 13 inspectors for the whole country. There are so few judges in the courts that people have reportedly waited in pre-trial detention for up to 10 years...Take lawyers. Zambia only has 1,000 of them, and they’re concentrated where the money is: Lusaka (government), Copper Belt (mining) and Livingstone (safari tourists). Some provinces don’t have any lawyers at all. The government operates a kind of legal bookmobile, a team of lawyers that travels around the country offering basic services, but it only comes to each province once every two months. If you miss it this time, you’re out of luck until it returns. Last year, onlysixlawyers were admitted to the bar out of 164 who took the exam. The year before that, it was16 out of 145.

Even after stripping the anecdotal hyperbole associated with such accounts, this really is a very sad state of affairs.

Notwithstanding recent optimism, the state of affairs in many parts of Africa is very dismal. The commodities boom, recent oil discoveries especially in East Africa, and the encouraging performance of a few reformers like Rwanda and Botswana have concealed fundamental problems of development traps, state capability, institutional deficiencies, leadership failures, and so on. I am not convinced with the argument that over the past decade or so some of the aforementioned continental successes have changed the dynamics of Africa's development in a manner as to set the stage for these countries to progress on a sustainable growth path.